BOT addressing household debt with new debt-solving measures

 

 

CHIANG MAI (NNT) - The financial economic situation in the northern provinces of Thailand improved in the third quarter of 2020. However, the Bank of Thailand (BOT) remains concerned about the country’s household debt, and has launched the ’debt resolution expressway’ measure to help debtors.

 

The Senior Director of the BOT’s Northern Region Office, Tharith Panpiemraas, said today the region’s financial economic situation in the third quarter had improved on its previous quarter. Although private consumption fell in line with decreasing purchasing power, the situation was buoyed by the government’s stimulus measures, such as the We Travel Together tourism campaign and the co-pay scheme. There was an increase in employment, while investment from the private sector rose 0.3 percent, mainly driven by construction of houses priced at 3 million baht or lower. Low interest rates, coupled with a depreciation of the baht, led to growing investment in the industrial sector. The agricultural sector also experienced growth, but its output dropped 3.6 percent due to the drought situation.

 

One of the factors affecting the financial economy in the North is the ratio of household debt to the country’s gross domestic product (GDP), which remains high. Most debts are related to consumption and short-term loans with high interest rates, which are hindering the growth of private consumption. To help debtors and limit non-performing loans (NPLs), people can open up Google and type ’debt resolution expressway’, while borrowers saddled with NPLs can type ’debt clinic’ to receive assistance.

 

-- © Copyright NNT 2020-11-04

 

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14 minutes ago, snoop1130 said:

'debt clinic'

They better have some strong remedy. Bitter, I'm sure. 

 

1 hour ago, snoop1130 said:

Although private consumption fell in line with decreasing purchasing power, the situation was buoyed by the government’s stimulus measures, such as the We Travel Together tourism campaign and the co-pay scheme. 

 

One of the factors affecting the financial economy in the North is the ratio of household debt to the country’s gross domestic product (GDP), which remains high. Most debts are related to consumption and short-term loans with high interest rates, which are hindering the growth of private consumption. To help debtors and limit non-performing loans (NPLs), people can open up Google and type ’debt resolution expressway’, while borrowers saddled with NPLs can type ’debt clinic’ to receive assistance.

 

Household debt is nationwide and not just in the north. How will consumers spending more money on We Travel Together tourism help the debt levels of individuals?

 

Borrowers won't be saddled with non-performing-loans (NPLs) it's the lenders who are saddled with them. The borrowers are saddled with unaffordable expensive DEBT that should probably never have been extended to them!

 

16 hours ago, snoop1130 said:

Although private consumption fell in line with decreasing purchasing power, the situation was buoyed by the government’s stimulus measures, such as the We Travel Together tourism campaign and the co-pay scheme.

Coerced by the government to spend money they can't afford.

The BoT urgently needs to take the commercial banks on a shorter leash. That they can extend insane amounts of consumer credit to people - who can hardly afford to service that debt when all their overtime payments and bonuses are factored in - can only end in tears. In a sustained economic downturn with mass layoffs and pay cuts, that's a disaster waiting to happen and ultimately a threat to the stability of the banking system itself.

 

Also, I don't see any reason to allow a bona fide bank to charge 28% interest - that's loan shark territory. If a person's credit rating is that poor that such an interest rate is warranted to offset the high risk, that person shouldn't be given credit at all.

5 hours ago, Caldera said:

The BoT urgently needs to take the commercial banks on a shorter leash. That they can extend insane amounts of consumer credit to people - who can hardly afford to service that debt when all their overtime payments and bonuses are factored in - can only end in tears. In a sustained economic downturn with mass layoffs and pay cuts, that's a disaster waiting to happen and ultimately a threat to the stability of the banking system itself.

 

Also, I don't see any reason to allow a bona fide bank to charge 28% interest - that's loan shark territory. If a person's credit rating is that poor that such an interest rate is warranted to offset the high risk, that person shouldn't be given credit at all.

And there is where the Nail has been well and truly knocked on the Head.

In pursuit of Profits, the Banks have been lending Money to People that really should not be able to borrow, due to there already existing Loans and Financial commitments, or poor vetting procedures..

I am convinced that all this is going to turn round and Bite the Banks on the A@@e big time.

A high percentage of the Money Loaned, has been Loaned against bad Asset, such as Cars which depreciate in value, bad Land Valuations, and also poor House evaluations for Mortgages.

I have not heard of 28% Interest Rates. This not to say there are not, it just means that I have not heard of them. I have heard many accounts of 20% rates, which is still Bandit Territory.

 

 

3 hours ago, Cake Monster said:

I have not heard of 28% Interest Rates. This not to say there are not, it just means that I have not heard of them. I have heard many accounts of 20% rates, which is still Bandit Territory.

 

I just saw a Thai friend's "Personal Loan" statement from SCB. 28% interest, I kid you not. Shocking. I had seen credit cards that came close, too.

 

14 hours ago, Caldera said:

 

I just saw a Thai friend's "Personal Loan" statement from SCB. 28% interest, I kid you not. Shocking. I had seen credit cards that came close, too.

 

Jesus Christ on a Pushbike.

28% beggars belief. Why are these people so desperate to take Loans with those kind of rates attached to them.

Is it all for " Face ".